Investors Have Nearly Wiped Out 2012′s Commodity ETF Inflows: SocGen

By Brendan Conway

Dour sentiment in the commodity market continues to exhibit itself in exchange-traded fund flows, where Societe Generale strategists Arthur Van Slooten and Alain Bokobza note this morning that investors have drained nearly as much money from those funds globally as they put in during the entirety of 2012.

Global commodity exchange-traded product outflows so far this year tally $17 billion by their count, versus $18.1 billion inflows for all of 2012. The duo are focused on outflows in part as they reflect the grim feeling about the slowdown in Chinese economic growth, which has dampened appetite around the world for investing in base metals like copper.

What’s remarkable, though, is that sentiment doesn’t look so grim once you zero out the collapse in investing appetite for gold. Here in the U.S., SPDR Gold Trust (GLD) alone counts for $16 billion in 2013 commodity-fund outflows, and iShares Gold Trust (IAU) is the second heaviest ETF sell this year, with $1.4 billion in net outflows.

Some new money is making its way into bets against metals and leveraged commodity ETFs, but broad and diversified commodity baskets have also managed to draw in cash. Leading this group is the $6.4 billion PowerShares DB Commodity Index Fund (DBC), which has netted a fresh $220 million in investor money.

Even the battered iShares Silver Trust (SLV) is clinging to positive flows. Though redemptions recently picked up, net inflows are still a positive $78 million year-to-date. All figures not of SocGen’s making are from XTF.

At least in the U.S., investors aren’t necessarily sour on the entire field of commodities. Just the ones that are cratering.

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Chris Dieterich has covered the U.S. stock market for The Wall Street Journal and Dow Jones Newswires. He is a graduate of Regis University and the Missouri School of Journalism.